European countries are pursuing a consistent long-term policy to reduce the effect of greenhouse gases and produce cleaner energy. It is known that 75% of harmful emissions in the EU are due to electricity production. For this reason, countries have undertaken an ambitious strategy - to reduce net emissions by 55% by 2030 (programme of measures "Ready for 55"), to ensure a 32% share of renewable energy sources in final energy consumption and an improvement of 32.5% of energy efficiency. The war in Ukraine also contributed to a review of the energy strategies of European countries, to achieve energy independence and security of supply.
At the UN climate conference COP28, which took place in Dubai from November 30 to December 12, 2023, the leaders of 130 countries, including Bulgaria, united around the view that the production of electricity from renewable sources should be tripled , so that the world can meet the environmental challenges it faces.
„In order to triple the use of RES for all, it is clear that at this point only hydropower can provide the necessary balance and flexibility at this scale,” said the CEO of the International Hydropower Association, Eddie Rich. during the conference.
Bulgaria stands in solidarity with European green transition policies. The country has the conditions and resources to produce energy from the sun and water. However, there is a lack of a modern national energy strategy that would provide more clarity and predictability for the future development of Bulgarian energy in the context of the transition to lower carbon emissions.
In 2023, RES produced 20% of the total amount of energy produced by the country, and hydro plants produced 8% of the total amount of electricity. Hydroelectric plants in Bulgaria provide between 55% and 60% of the production of renewable green energy.
In order to create favorable conditions for the operation of the Bulgarian hydropower plants, which generate cheap, green energy and play a huge role in the balancing and regulation of the electricity system, the regulatory framework that is in effect at the moment must be changed. Budget 2024 provides for the preservation of the extraordinary restrictive measures in the energy sector that were introduced after the covid crisis, which means that the income ceiling for electricity producers remains and compensation for the costs of companies above a certain limit.
The budget practically copies the current measures in full, but this is no guarantee that both the income ceilings and compensations for businesses will be kept at the same levels. There may be changes in the specific amounts, as they are determined by a decision of the Council of Ministers.
In the case of producers of electricity from RES without a contract for compensation with premiums, the ceiling remains BGN 300/mWh. At the current values of the Bulgarian Independent Energy Exchange, this means that these producers will not make contributions, but this would change if electricity prices rise again.
These regulations lead to a lack of investment and a natural loss of Bulgaria's competitive advantage for green energy production. In practice, due to the restrictive regulatory framework in recent years, the activity of the hydropower sector, which provides half of the green energy in the country, has become significantly more difficult. The few investments in the sector are aimed at maintenance and rehabilitation of the existing hydropower plants. The reasons are not limited to the revenue ceiling, one can also add the difficult processes of issuing water use permits, as well as the restrictions regarding protected areas.
There are enough reasons for Bulgaria to continue to lose its positions in the coming years, and due to the integrated European market – for our neighboring countries to take a significant share in the production of green energy in the region.
Unlike Bulgaria, our neighboring countries pursue a consistent, active policy for the development and support of green energy production.
An example in this regard is our southern neighbor. Greece updates its "Energy-Climate" plan for 2030 Greece is in the process of fulfilling its goals for an 81% share of RES in its electricity production in 2030, for comparison, Bulgaria is betting on a maximum of 27.06% share of green energy by 2030, and the rest is for coal and nuclear power .
Romania, whose electricity market generates annual revenues of around €5 billion, is also investing heavily in green energy. The country will set aside 1.3 billion euros per year from its modernization fund to support the transition to a "green" electricity and 1 billion euros per year to modernize the network so that it can absorb the new capacities.
The state company Hidroelectrica, which owns and manages 182 hydroelectric plants and provides a third of the country's electricity production, successfully organized investments through the stock exchange, offering and successfully selling shares for 2 billion euros. Hidroelectrica plans to add 3.3 gigawatts of new capacity over the next few years - more than half of its current portfolio. Most of this will be solar and wind, and only about 300 megawatts will be new hydroelectric facilities.
At the COP 28 summit in Dubai with a special focus on Turkey, it was reported that around 55% of Turkey's installed capacity today consists of renewable energy sources. The national energy plan, announced last February, foresees this share reaching 65% by 2035.
Turkey has implemented regulatory reform that greatly simplifies unlicensed electricity generation. The reform spurred billions of dollars worth of investment in the country's solar energy industry. The “Produce Where You Want, Consume Where You Want” campaign enables consumers who cannot find space for unlicensed solar power generation facilities in areas of dense urban development or industrial zones to set up facilities across the country.
Within one year, nearly 10 billion dollars have been invested in RES. 2,000 MW have been commissioned, bringing the total installed capacity of unlicensed power generation capacity to 13,500 MW. The regulatory change allows consumers to sell excess energy back into the grid, generating additional income. Type of the second largest chain electricity plant in Europe, Kaloun Karınar, which is also one of the fifth largest in the world.
Bulgaria has the potential to produce green energy from both solar and wind as well as water. Hydro plants produce half of the country's green energy. The lack of changes in the sector to regulate at the legislative level some of the aspects related to the operation of hydroelectric power plants, in order to protect the legal certainty and predictability of economic entities, in combination with the introduction of restrictive regulations, led to the freezing of investments in hydroelectric power plants , and an even more complex outlook for the future. Against the background of the flexible policies of our neighbors, the Bulgarian policy seems increasingly alarming and inadequate, which not only does not contribute to investments, but leads to a limitation of the installed capacities for the production of green energy, which is certainly not in the interest of the Bulgarian consumers .